Unemployment and Temporary Disability Insurance Taxes (FUTA/SUTA/TDI): New York
Federal law and guidance on this subject should be reviewed together with this section.
Author: Vicki M. Lambert, The Payroll Advisor
- New York State (NYS) uses the Internal Revenue Service's (IRS's) Common Law Test to determine who is an employee for state unemployment insurance (SUI) tax purposes. See Common Law Test.
- The law defines wages for SUI purposes as all remuneration paid, except remuneration that exceeds the current taxable wage base. The annual total SUI tax rate is based on a range of rates plus the Reemployment Services Fund tax. See SUI Taxable Wages and Wage Base.
- An employer's SUI tax rate is divided into two parts - the normal tax and the subsidiary tax. Both of these taxes are experience rated, and the rates depend on the individual employer's unemployment experience. See Contribution Rates and Experience Rating.
- The NYS anti-SUTA dumping law mirrors the federal SUTA Dumping Prevention Act. Under state regulations, employers that knowingly attempt to manipulate businesses to get a lower tax rate are liable for serious penalties. See SUTA Dumping.
- The state permits voluntary contributions to lower SUI tax rates. In addition, a joint account may be established on application by any two or more qualified employers that are in the same or related kinds of business, or that have a common financial interest, so that all firms in the joint account will have the same tax rate. See Voluntary Contributions; Joint or Combined Accounts.
- An employer that is required to make unemployment insurance contributions and to withhold employment taxes must electronically file a quarterly report. In addition, employers that operate more than one establishment in NYS may be requested to submit Multiple Worksite Reports. See Quarterly Reporting Requirements; Multiple Worksite Reporting.
- An employer's account will be charged for overpayments caused by the employer's failure to properly respond to requests for information about benefit claims. See Benefit Overpayments.
- All employers in NYS must maintain records for each employee for the current year and at least the three preceding years and keep them available for inspection by the state Department of Labor. See Recordkeeping Requirements.
- New York employers are required to provide employees with temporary disability insurance (TDI) benefits for nonwork-related injury or illness or pregnancy-related disabilities. Employers may provide coverage under the state plan. Large employers have the option to self-insure without contributing to the state plan. Employers are permitted to collect contributions from employees to offset the cost of providing benefits. See Temporary Disability Insurance.
- New York employers may make deductions from employees' pay to fund paid family leave (PFL) benefits. PFL is being gradually phased in between January 1, 2018, and January 1, 2021. Eligible employees may take up to 12 weeks of PFL to care for an infant, to care for a family member with a serious health condition or if time off is need when a family member is called to active military service. See Paid Family Leave.